SATS share price fall 1.70% after it announces divestment of healthcare-food business
Following the divestment, Food and Allied Support Services Corporation will no longer be a subsidiary of SATS Investment.
In-flight food caterer SATS on Tuesday saw its shares sink 1.70% after it said it has divested its 51% stake in Food and Allied Support Services Corporation (FASSCO) to Planet Foods for S$1.02 million.
The healthcare-food business is a joint venture between SATS’ wholly-owned subsidiary SATS Investment and Planet Foods.
Following the divestment, FASSCO will no longer be a subsidiary of SATS Investment.
SATS share price down 1.70%
Shares of SATS fell by nine Singapore cents to S$5.20 as of 3.10pm Singapore time on Wednesday.
Prior to the announcement, SATS’ shares closed lower on Tuesday, down by eight Singapore cents or 1.49%, at S$5.29.
Year-to-date, the firm’s shares have risen by 11.8%, from S$4.65 on January 2, 2019.
Healthcare-food business not in line with company strategy
Providing an explanation to its decision, SATS said it is focusing on all its resources to maintain its lead in the airline catering and ground handling space, as well as supplying the growing food service chains in large cities in Asia.
‘The proposed transaction is a disposal of a business that is not in line with this strategy’, it added.
The firm said the divestment is not expected to have any material impact on the company’s net tangible assets per share and consolidated earnings per share for the current financial year.
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